Impermanent Loss Calculator

Figure out the potential risk of providing liquidity to a DeFi pool compared to just holding your assets.

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This tool is for educational purposes only. It demonstrates the concept of Impermanent Loss in a standard 50/50 liquidity pool. Actual results can vary due to trading fees, protocol differences, and market volatility.

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See Your True DeFi Risk

Ever wondered if you’d have been better off just holding your crypto instead of putting it in a liquidity pool? That nagging feeling is caused by something called Impermanent Loss (IL), and it’s one of the biggest risks in DeFi. Our calculator makes it simple to see this risk clearly. Just plug in a couple of numbers to see how providing liquidity compares to simply holding your assets. No complex spreadsheets, just a straight answer.

How It Works in 3 Steps

  1. Enter Your Pair: Start by typing in the two tokens in your liquidity pool (e.g., ETH and USDC).
  2. Add Your Investment: Put in your total initial investment amount in USD.
  3. Predict the Future: Enter a hypothetical price change for each token. For example, what happens if ETH goes up 50% while USDC stays the same? Click “Calculate” to find out.

The tool will instantly show you the value of your assets if you had just held them vs. their value in the LP, and it will calculate the exact dollar amount and percentage of your Impermanent Loss.

What is Impermanent Loss, Anyway?

Impermanent Loss is the difference in value between holding assets in your wallet versus providing liquidity for them in a DeFi protocol. It happens because the liquidity pool has to constantly maintain a balance between the two assets. When the price of one token changes significantly compared to the other, the value of your stake in the pool can end up being less than if you had just held the two tokens separately. It’s called “impermanent” because if the prices return to their original ratio, the loss disappears. But if you withdraw your funds while the prices are different, the loss becomes very real.

Frequently Asked Questions (FAQ)

Does Impermanent Loss mean I’m losing money? Not necessarily. The trading fees you earn from being a liquidity provider can often outweigh the Impermanent Loss. This calculator helps you understand just one side of the equation—the potential downside from price changes—so you can weigh it against the fees you expect to earn.

Is this calculator 100% accurate? This tool perfectly calculates Impermanent Loss based on the standard 50/50 liquidity pool formula. However, real-world returns will also be affected by trading fees, protocol-specific rules, and price slippage, which are not included here.

How can I avoid Impermanent Loss? The only way to completely avoid it is to not provide liquidity. However, you can minimize it by providing liquidity for pairs that tend to stay in a tight trading range, like two different stablecoins (e.g., USDC and USDT).